Welcome to Neogen’s fourth quarter and fiscal year 2010 year end result Conference Call. My name is Christine and I will be your operator for today's conference. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this call is being recorded. I will now turn the call over to Mr. Jim Herbert. Mr. Herbert, you may begin.

Jim Herbert

Thank you, Christine. Good morning and welcome to our regular quarterly conference call for investors and analysts. As it was announced this does cover our fourth quarter which ended May 31 and we'll also of course now be able to provide you with a summary of the company's complete fiscal year. I would remind you that some of the statements made here today could be termed as forward-looking statements. These forward-looking statements, of course, are subject to certain risks and uncertainties and the actual results may differ from those we discuss today. These risks that are associated with our business are covered in part in the company's Form 10-K as is filed with the Securities and Exchange Commission.

In addition to those of you who are joining us today by live telephone conference, I would also welcome those who may be joined by way of the simulcast on the Worldwide Web. These comments with some exhibits will be on the web for approximately 90 days.

Following our comments, prepared comments here this morning, we'll entertain questions from participant who is are joined on this live telephone conference and I'm joined today by Lon Bohannon, Neogen's President and Rick Current, our Chief Financial Officer. Earlier today Neogen issued a press release announcing the results of our fourth quarter and full 12 months of the company's 2010 fiscal year.

As in earlier quarters of this year, I'm pleased with the results and have continued to have the greatest respect for our team of 600 employees now located around the world who just never quit, despite the fact that this was one of the most – most have been – most of our markets have undergone some pretty tough economic stress during the past 12 months.

Let me first address the fourth quarter. Our net income for the fourth quarter jumped 36% to $4.6 million. That equates to $0.20 a share as compared to last year's split adjusted $0.15 a share. Fourth quarter revenues increased 27% compared to the previous year, to slightly over $39 million in the fourth quarter.

And by the way, the fourth quarter was, I think it marks the 73rd quarter in the past 78 in which we've shown increased revenues compared to the previous year. That's a record – A revenue record now that now spans over 19 years. It also marks a span of over 17 years in which the company has shown consecutive profitable quarters from its operations.

With the fourth quarter now recorded, we can now, of course, review for you our 2010 fiscal year. Revenues for the year increased 18% to approximately $140.5 million. That's up from $119 million last year. I think it's even more noteworthy as this year's results were net income, which increased 26% from last year to $17.5 million and that equates to $0.76 a share, compared to $0.61 a share a year ago.

As been our strategy for the past number of years, we grew both the top and the bottom line this year through an increase in market share, introduction of new products to the market and synergistic acquisitions. Though income from new acquisitions helped us attain this year's growth, I think it is particularly noteworthy that same-store sales or organic growth, if you will, increased 13% even though it’s been a troubled financial year for many of our customers as I mentioned earlier.

Rick Current's comments in this morning's press release, concerning financial performance metrics for the year, Rick said that they did match the exceptional level in operating performance and we generated $28 million in cash flow from operations for the year and decreased our inventory as a percent of sales. In fact, we had slightly less inventory at year-end than we did at the beginning of the year, despite the fact that we increased revenues by 18%.

The balance sheet continues to be strong. We finished the year with $22.8 million in cash, up $9 million from the beginning of the year even though we accomplished two acquisitions from the available cash. It's also noteworthy, I think, that the results of this year were responsible for a 19% increase in shareholder equity as compared to last year end. We did a couple of nice acquisitions during the year that will likely have more impact on our new 2011 fiscal year than they did in the year that we just completed.

In December we acquired the BioKits food safety business from Gen-Probe that added a number of food allergy diagnostic tests that were not currently being offered by Neogen. This acquisition also provided us with an attractive line of tests to determine meat speciation, as a tool to prevent economic adulteration.

The BioKits business had a good market position in several European countries and that's added additional penetration for Scotland-based Neogen Europe operations. The BioKits business was located in New South Wales in the U.K. Following the acquisition, we determined that most effective integration of that business would be to relocate the sales and marketing portion, along with selling the manufacturing to our operations in Scotland and then move the remainder of it, particularly the manufacturing operations to our efficient business here in Lansing, Michigan.

As of the 1st of May that integration was complete and the operation of Wales has now been closed. The acquisition brought to us an additional $3 million in revenue based on its business in the prior 12 months before we bought it. However, we've been successful in growing that business both in the U.S. and in Europe over the past six months since it has been a part of Neogen.

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